30 Jul 2024
TOOLS
Login to access your documents and resources.
Alternatives
Timberland’s expanding investable universe
Timberland earns a position in many institutional investors’ portfolios because of its portfolio-level benefits – a lack of correlation with capital markets, ability to hedge inflation, and steady income return. For some investors, portfolio decarbonization is an increasingly important portfolio benefit that also comes from an allocation to timberland. In all cases, the benefits that timberland can bring to a portfolio depend critically on the scale of the allocation and investment selection – and these are decisions that can only be made with a clear understanding of the investable universe. The expanse of the investable universe determines both the set of possible investment strategies and investment scale.
Timberland investment decisions and portfolio design are a function of many factors but perhaps most fundamental is an understanding of the investable universe. In this paper we describe the institutional investment universe for timberland and estimate its current size. Next, we characterize the major investment geographies that make up the universe and discuss changes observed over the past decade. We then examine market drivers creating opportunities for expansion of the investable universe. Finally, we conclude with key takeaways for both new and existing timberland investors.
Related articles
Alternatives
Investing in timberland
We provide the case for investing in timberland through five key principles, including the inherent carbon benefits of the asset class that further enhance the case.
Alternatives
Investing in biodiversity
Markets to finance the protection, better management and restoration of nature
Unprecedented global action to address the decline in nature and its causes is underway, and investments in biodiversity will be a critical part of these efforts.
Natural capital
An introduction to carbon markets for land-based investments
Climate mitigation benefits can be realized by investing in nature-based climate solutions (NCS) and offer investors in land-based assets the potential to generate verified carbon credits from their investments.
Our offices